A biblical theology that is truly biblical must necessarily deal with the biblical concept of covenant. This means that a biblical theology that is truly biblical will necessarily be a kind of covenant theology. This is necessarily so because of the way in which God has used covenants to structure his relationship with Israel and indeed all of humanity.
When thinking of covenant theology, a question arises concerning the legitimacy of the system of theology involving the covenant of works and the covenant of grace that is taught in the Westminster Confession. My opinion is that the distinction between a covenant of works in the garden of Eden and a postlapsarian covenant of grace that is taught in the Westminster Confession is helpful provided it is understood and applied in a manner consistent with the biblical description of God’s prelapsarian and postlapsarian dealings with humanity. For example, it is not correct to assume that the human obligation of obedience (i.e., works) in the garden means that there was no such thing as non-redemptive grace in the garden. Furthermore, given that the Old Testament establishes the framework of the covenant theology of the Bible, any covenant theology that is truly biblical must be consistent with the Old Testament teaching on the covenants as revealed in various key texts such as the book of Deuteronomy.
If by a covenant of works we understand that there could be no blessing in the garden of Eden without perfect obedience to the word of God, then the term covenant of works can be a helpful concept. And if by the covenant of grace we understand that blessing in the postlapsarian world is conditional upon a positive but imperfect response to the word of God in the context of atoning grace (what the Westminster Confession calls faith), then this can also be a helpful term.
But there is more to the covenant theology of the Bible than just a distinction between a so-called covenant of works and a covenant of grace. As the advocates of new covenant theology assert, it should be recognized that the primary covenantal distinction in the Bible and in Paul is not the distinction between the so-called covenant of works and the covenant of grace, but the distinction between the old covenant in Moses and the new covenant in Christ. Yet the advocates of new covenant theology are also mistaken when they deny that the old covenant was a covenant of grace.
The old covenant versus new covenant distinction that is present in the Bible is ultimately a distinction between different administrations of God’s singular gracious dealings with his people. The old covenant is a covenant of grace because the offer of the forgiveness of sins in Christ was proleptically communicated to the righteous within Israel through the Mosaic sacrificial system. Because atonement was offered to Israel as part of the Mosaic sacrificial system, the old covenant must be distinguished from the Adamic administration under which there was no system of atonement but only the punishment of death in the case of sin. It is important to recognize, therefore, that the personal covenantal obligation of the people of Israel was not perfect obedience. Although it is true that no one can live in the presence of God without moral perfection, the grace of the old covenant is seen in the fact that this need for moral perfection was not required of the nation or of the individual members of the covenant per se, but graciously provided by God through the sacrificial system, which functioned as a means by which the perfect righteousness of Christ could be imputed proleptically to the old covenant saints.
But even though the old covenant was a covenant of grace, it is important to understand that God laid down a condition for the people of Israel that to benefit from the grace offered as part of the covenant the people were required to exhibit faith on both a national and an individual level, where faith is understood to mean a holistic commitment to the whole word of God as revealed through Moses and the prophets. Furthermore, it is necessary to understand that, because God’s old covenant revelation is characteristically described in the Old Testament as law, the proper holistic response of faith is frequently spoken of in the Old Testament (as it has been in orthodox Judaism throughout the centuries) as doing the law. This means that the old covenant is described in the Bible as being a gracious covenant that requires the works of covenant obedience (i.e., holistic covenant faith) on the part of Israel. In the context of the grace of atonement offered through the Mosaic sacrificial system, these works of covenant obedience consisted of a persevering commitment to the covenant with God and its stipulations. In other words, the old covenant was a conditional covenant of grace. The condition of the Mosaic covenant was faith; but this faith was understood in holistic terms, and primarily expressed using the language of hearing and doing, i.e., covenant obedience.
Despite the fact that the old covenant was a covenant of grace, it is also important to understand that the conditional nature of the old covenant meant that Israel’s lack of commitment to the Mosaic covenant on a national level resulted in the old covenant becoming a covenant of condemnation, with the law of Moses functioning primarily as a “law of sin and death” (Rom 8:2). Even those who had kept faith with God under the old covenant were caught up in the condemnation of the nation as a whole. They were unable to experience eschatological justification and the fullness of covenant blessing because of the covenant rebellion of the majority. In this way, the old covenant ironically but providentially proved to be a replication of the so-called (Adamic) covenant of works, even though it was a covenant of grace. Hence, Paul’s teaching that “the law [of Moses] was added to increase the trespass [of Adam]” (Rom 5:20), and that “by the works of the law all flesh will not be justified” (Rom 3:20). That is to say, because of Israel’s failure as a nation in keeping covenant faith with God (i.e, because of their failure to keep the law of Moses), the old covenant was unable to bring eschatological justification and the fullness of salvation and blessing to humanity.
But this failure of the old covenant to achieve the fullness of covenant blessing for humanity was part of God’s plan. The so-called pedagogical function of the law is properly to be found in the idea that the failure of Israel under the law of Moses highlights the need for the new covenant in Christ as the solution to the problem of human sin that is described in the Old Testament. There was grace present in the old covenant, but a greater work of God’s grace was necessary for the fullness of salvation to be achieved. This new work of grace through the new covenant in Christ was clearly prophesied in the Old Testament, where it is taught that God would establish a new covenant by sending Christ, his suffering but Spirit-filled Servant, to make atonement for God’s people, and to break the power of sin on the cross, who thereupon would pour out the Holy Spirit to effect the circumcision of the hearts of not only the people of Israel but Gentiles as well, so that many people of many nations might be brought to faith in Christ, and experience the grace of forgiveness from God, so that God’s promise of the blessing of the nations in Abraham might be fulfilled.
Because Old Testament prophecy speaks of the new covenant as effecting the proper response that was required of Israel but lacking under the old covenant, and because the new covenant is portrayed as being the fulfillment of the old covenant, the new covenant in Christ exhibits the same covenant dynamics as the old covenant. Thus, the condition for benefiting from the grace of God offered in Christ likewise is faith, but in the new covenant age this is to be understood as a holistic commitment to the whole new word of God as revealed through Christ and his apostles. This contrasts with the holistic commitment to God’s word in the law of Moses under the old covenant. In the transition from the old covenant to the new, there is, therefore, a change in the mediators and content of covenant law; but this is not to be understood as if Moses and Christ are opposed to each other. Old covenant law commanded that when the Messiah appeared, Israel and the nations must submit to his authority and obey his word (Deut 18:15, 19; Ps 2:10–12). With the coming of the new covenant in Christ, therefore, the old covenant has been superseded. Indeed, the old covenant has now become more comprehensively a covenant of condemnation than what it proved to be for old covenant Israel previously, because maintaining a primary allegiance to Moses even though the Messiah has come is to deny the lordship of Christ and constitutes rebellion against God. Hence, Paul’s teaching that justification is by faith in Christ and no longer by the works of the Mosaic law (Rom 10:5–6).
The new covenant, therefore, like the old covenant, is a conditional covenant of grace; but the new covenant will succeed where the old covenant failed precisely because Christ will work through the power of the Holy Spirit to ensure that the new covenant community (as a whole) will fulfill the covenant condition of holistic faith. Those individuals who exhibit the right response of faith under the new covenant experience the grace of justification in the present, and will (on condition on perseverance in faith) be justified by God on the day of judgment, and thereby qualified to live eternally in God’s holy presence, experiencing the fullness of salvation and covenant blessing forever more.